Seven Circles of Sotheby’s Selling — UPDATED WITH VIDEO

There were art works by Salvador Dali, Francis Bacon, Auguste Rodin and Jeff Koons, but everyone was watching Padma Lakshmi’s pants. The Top Chef co-host, in impossibly tight coral-colored capris covered in a gold lamé print, smiled and swanned at Sotheby’s, poising at the front of a book-signing line to schmooze with author James Frey.

What was the occasion for this unlikely mix of literature, reality TV and fine art? “Divine Comedy,” an elaborate themed display of art by the former director of the Guggenheim Museum, now Sotheby’s executive, Lisa Dennison. The exhibition, on view through Oct. 19, invites the visitor to Sotheby’s to tour hell, heaven and purgatory in the form of artworks depicting each, several of the works spectacular or particularly rare. But despite a gimmicky conceit and lighthearted demeanor–“have fun,” urged the wall text, right by a huge crucifix depicting Jesus Christ as a wart-covered frog–the show is very much about money. It represents a new business model for the auctioneer.

Many of the works on view are actually on loan from art galleries–Sperone Westwater and Paul Kasmin among them–seeking to use Sotheby’s client list and contacts to market art privately. While it was originally announced that about half of the “Divine Comedy” art is for sale, virtually everything is, Sotheby’s later confirmed. Commissions and split of the profits is being decided on a deal-by-deal basis.

London dealer Johnny Van Haeften has lent Franz Francken’s 17th-century masterpiece Mankind’s Eternal Dilemma–The Choice Between Vice and Virtue, which sold at a European auction for about $7 million; he hopes to flip it for $10 million here.

The show appears designed to generate controversy and attention–a kneeling Hitler is thrown in for good measure, along with that crucified frog, which is a work by Martin Kippenberger that the Pope actually declared blasphemous in 2008. The auctioneer’s celebrity client list was used for the opening party. (The resulting “gets” were Julianne Moore, Emily Mortimer and Alan Cumming.)

Ms. Dennison granted the financial motives for the show–“We are an auction house,” but said the show had provided viewers the opportunity to see “remarkable works” that otherwise would never have been on public view. As for courting controversy, Ms. Dennison said that’s not the case, but “we couldn’t ignore art that comments outside established traditions.”

Drafted into all this was James Frey, who is co-owner of a Lower East Side art gallery–Half Gallery–and has written several art-catalog essays. He was on hand to sign a limited-edition exhibition catalog that featured his “Il Divino Bambino,” a reinterpretation of Dante’s story. He declined to discuss his compensation, and said he was very surprised at how many people wanted a signed catalog–“I thought I’d do two and be done with it.” Interestingly, the famous dissembler said that his two favorite works in the show were the Francken and the only “fake” chosen for the whole exhibition, a particularly harsh version of the afterlife painted not by a famous artist but by his “follower,” i.e., copycat. “I love the fake Bosch,” he said.

Update 10/8, 10:30 a.m.

The Observer’s own Amir Shoucri was treated to a preview of the collection, and produced the stellar video below. Check it out!